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States Rally Against Cut to EPA's Clean Water Fund

Marty Coyne, Environment & Energy Daily senior reporter

This story first appeared in Friday's Greenwire. Each state in the nation will lose millions of dollars for critical water infrastructure projects unless Congress rejects President Bush's proposal to cut $500 million from the U.S. EPA's clean water loan program, which finances wastewater treatment plant upgrades, according to a new report by states, local governments, unions, environmentalists and engineers.

The report was released last week in anticipation of a Senate Appropriations Committee markup this week on EPA's fiscal year 2005 spending bill (see related story). It follows a letter from 31 Republican and Democratic governors telling Senate leaders the president's proposed cuts to the loan program, known as the "state revolving fund" (SRF), are unacceptable.

"Ultimately the success of the Clean Water Act demands that America maintain a long-term, sustainable source of federal funding to meet the water infrastructure needs of future generations," the report states. "However, if Congress approves the administration's proposed cuts to the Clean Water SRF, then future prospects for funding will likely wash away."

The report notes that the House Appropriations Committee "for the first time ever" approved an SRF cut in July by passing Bush's proposal to reduce funding for the program from $1.34 billion in FY '04 to $850 million in FY '05.

With 45 percent of the nation's assessed waters not meeting EPA standards and sewer overflows numbering between 23,000 and 75,000 a year, the needs for water infrastructure upgrades are immense, according to the report. According to EPA estimates, more than $388 billion will be needed over the next 15 years to address the nation's clean water infrastructure problems. The Congressional Budget Office, meanwhile, has estimated that $17 billion will be required in each of the next 20 years for investment in water system upgrades.

The report notes that the SRF has accounted for $47 billion in low-interest loans to wastewater treatment projects between 1998 and 2003, with a return on investment estimated at $2.11 for every SRF dollar spent.

Essential wastewater projects in the SRF pipeline are detailed in the report, which concludes that more than $100 million and thousands of jobs would be lost in politically important states under the Bush budget.

For example, Alaska, the home state of Senate Appropriations Committee Chairman Ted Stevens (R), would lose $3.5 million and create 165 fewer jobs, according to the report. Alaska has a total of 46 clean water SRF projects awaiting $52.2 million on the state's 2004 priority list for the program. West Virginia, home of Sen. Robert Byrd (D), the top Democrat of the Appropriations Committee, would lose $9.9 million and create 440 fewer jobs. The state has 80 projects, in Charleston and eight other cities, worth $368.5 million in the SRF pipeline.

Senate VA-HUD Appropriations Subcommittee Chairman Kit Bond (R-Mo.), who has urged Senate leaders to restore the SRF to FY '04 levels, would see his state lose up to $47.3 million and create 2,245 fewer jobs. Missouri has 46 SRF projects awaiting $240.3 million on its 2004 priority list, according to the report. Meanwhile, Maryland -- the home state to Sen. Barbara Mikulski (D), the top Democrat on Bond's subcommittee -- would lose as much as $18.2 million and create 685 fewer jobs, the report claims. The state has 106 SRF projects totaling $243.4 million on the state's 2004 priority list.

Senate Minority Leader Tom Daschle's home state of South Dakota, which has 43 high priority SRF projects awaiting $33.3 million, would lose up to $3 million and create 145 fewer jobs, according to the report. And Tennessee -- home to Senate Majority Leader Bill Frist (R) and House Water Resources and Environment Subcommittee Chairman John Duncan (R) -- would lose $8.5 million and create about 400 fewer jobs in a state with 122 projects needing $455.7 million on the SRF priority list.

Groups that produced the report include the Association of Metropolitan Sewerage Agencies, the Association of State and Interstate Water Pollution Control Administrators, the AFL-CIO, Service Employees International Union, the Sierra Club and the Natural Resources Defense Council.

The group of governors told Frist, Daschle, Stevens and Byrd in their letter that the SRF program is "one of the most successful public works program in the nation's history." Given the contribution that the program has made to cutting pollution from sewers as well as urban and agricultural runoff, "now is not the time to be cutting funding for this critical infrastructure program," the governors wrote.

The chief executives called for a minimum SRF funding level of $1.35 billion and urged more to avoid "putting many local clean water projects at serious risk."

Indiana Gov. Joseph Kernan (D) spearheaded the governors' lobbying effort, which included prominent Republicans Arnold Schwarzenegger of California, George Pataki of New York, Dirk Kempthorne of Idaho and Judy Martz of Montana.

The SRF lobbying effort by governors and various interest groups follows similar efforts in June by a bipartisan group of 50 senators (E&E Daily, June 3).

A Bush-Cheney '04 campaign official said this week that although the president has proposed an SRF cut for next year, he has articulated a longer commitment to the program than members of Congress (Greenwire, Sept. 15).

The Senate Appropriations Committee is expected to vote on the EPA spending bill Tuesday. While Stevens is considering funding the SRF above Bush's request, it was unclear at press time whether all of the $500 million would be restored. "We'll know next week," Bond said.

Click here to view the report by states, local governments, unions, environmentalists and engineers.